Many economic development projects that may have been viable in the past without public sector assistance are no longer possible. The result of the financial crisis is a dramatic decline in availability of funding and tightening of budgets. This weak overall economic climate has severely reduced the level of economic development activity at a time when it is most needed by government.
These same economic conditions have severely limited discretionary spending by local governments. More than ever, local governments want to minimize the money spent or put at risk through incentives to land a new economic development activity. At the same time, the local government wants to maximize the benefits associated with the limited incentive investments. Without creative solutions to balance financial risk, significant new economic development is unlikely or will occur very slowly. This makes viable Public-Private Partnerships that balance the risk among the participants, the preferred method for municipalities wanting to be actively engaged in promoting economic development.